Heir Miles: Your loyalty points don’t have to die with you

Patrick Sojka redeems points every year to go on a trip. Right now, he’s got $3,000 worth of points through his Mastercard for a July vacation to Maui.

“If something were to happen to me tomorrow, there are a lot of points on the line,” said the Calgary father of two and founder of RewardsCanada.ca, a travel rewards resource.

Most travel and credit-card programs allow customers to bequeath their hard-earned points. But as loyalty programs proliferate for airlines, hotels and credit cards, so do the challenges — and rewards — for heirs who inherit these digital assets.

If people are in a situation where they have a lot of points with either a cash value or a value to them such as free travel, then they want to look at their policy and see what they can do with them

“Some people’s Air Miles are extremely valuable,” said Lynne Butler, a lawyer and author of Estate Planning through Family Meetings. “I have a friend who lives in Montreal who flies to the U.S. every second week for his work. He’s got a ton of air miles. His might be worth tens of thousands of dollars.”

According to a 2009 loyalty marketing census, loyal program memberships in Canada totalled 115 million and the average Canadian household was active in 9.2 programs.

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Canada’s loyalty landscape is dominated by national multi-merchant coalitions and airline programs, namely Air Miles and Aeroplan, which had 9.5 million collectors and 4 million members respectively in 2009, reported Colloquy, a provider of loyalty marketing publishing, education and research.

“If people are in a situation where they have a lot of points with either a cash value or a value to them such as free travel, then they want to look at their policy and see what they can do with them,” said Susannah Roth, associate lawyer at O’Sullivan Estate Lawyers in Toronto.

Those who wish to leave hard-earned points to heirs should decide whether they should be included in a will. Adding it ensures that all possible assets are identified; naming an heir can stave off family conflicts, and help executors find and distribute points. Be sure to include the account number and email address associated with the program.

The rules vary with every program and make point transfers complex. Some may require a copy of the death certificate and a letter from an executor.

With Aeroplan’s estate transfer policy, a beneficiary or heir will be able to redeem the outstanding balance for one year upon the declaration of death; they just need to provide a copy of the death certificate and a copy of the will, and pay a processing fee of $30 plus taxes. If there is no will, the person would need to provide sufficient evidence to prove he is the spouse or heir.

Air Miles allows you to merge your account free of charge with the account of the deceased by providing a death certificate and a letter signed by the person’s legal representative or executor.

Non-airline loyalty programs appear to have even more restrictions, based on calls made to these companies. The Marriott Rewards program for Marriott International Inc. hotel chain, for example, only allows spouses or domestic partners to inherit points. American Express Co’s credit card rewards program requires a call from an executor before it agrees to send a package of required forms.

Upon the death of a Shoppers Optimum Rewards Program member, the account is closed and no transfer is allowed. “If you wanted to transfer them before you die, you could do so provided that the other person is a member,” Tammy Smitham, a spokeswoman for Shoppers Drug Mart, said.

Mr. Sojka said if you want to avoid any bureaucracy, just provide your spouse or children with your program information and passwords, though this might technically be against the rules.

“Most programs allow you to book flights and hotels for friends and family and so much of it is done online, they don’t know who is booking it,” he said. “The easiest way around any rules or court cases is to provide all of your online access, password, user names, to a loved one and let them use the points as they wish.”

Tips for how to collect inherited points:

Before you make your first call, have copies of the death certificate, the deceased’s loyalty program account numbers, address and email details ready. Be sure you have your own account, into which the awards can be transferred.

While you may not need the will, you’ll need a statement from the executor naming a beneficiary, say representatives of loyalty programs at airlines, hotels and credit card companies.

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